Greenwashing is now a word that most of us are familiar with and although there are different definitions – the general theme is where an entity is making statements about their ‘greenness’ which are not matched by their actions.

ASIC have been actively pursuing a number of entities in their area and two of these actions have now been resolved through the court process.

In cases against two major investment companies, where ASIC alleged misleading claims about the sustainability of certain investment products, significant penalties have been imposed by the courts:

• $11.3 million for Mercer Superannuation (Australia) Ltd who admitted making misleading statements about the sustainable nature and characteristics of some of its superannuation investment options.
• $12.9 million for Vanguard Investments Australia who admitted to misleading investors that certain funds would be screened to exclude bond issuers with significant business activities in certain industries, including fossil fuels, when this was not always the case.

The lesson from these cases is clear: entities must have solid evidence to back up claims about their sustainability practices—whether related to carbon emissions, diversity, modern slavery, or other environmental and social commitments. Misleading statements on platforms such as websites, annual reports, and social media are being flagged, and enforcement actions are being taken to address these breaches, which can significantly erode consumer trust.

Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.

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